Nordstrom just gave an ugly outlook, shares crater

Nordstrom reported fourth-quarter revenues and earnings below
expectations on Thursday, with weak guidance. The shares tanked
as much as 7% in after-hours trading.

As part of its fourth-quarter earnings
announcement, the upscale fashion retailer said it expects
full-year adjusted earnings per share (EPS) of between $3.10 and
$3.35, but analysts had expected up to $3.55, according to
Bloomberg.

This projection was made "in response to current sales
trends," according to Nordstrom.

Across the industry, apparel retailers have struggled with
declining traffic and have used deep discounts to try and boost
sales.

The tally of the off-price Nordstrom Rack locations recently
outpaced the number of regular stores. Unlike some competitors,
Nordstrom customers can return items purchased at regular stores
to the Rack, as BuzzFeed News recently reported. Rack is a
fashion retailer owned by the department store.

And as Business Insider's Mallory Schlossberg
noted, this could distort customers' perception of the
store as a luxury brand, further discouraging them from
buying full-price apparel.

The company projected that EPS in the first half of the
year would decline by about 30% compared to the prior
period. It attributed this, in part, to costs associated with the
opening of its East Coast fulfillment center in August and other
new stores, as well as the shifting of its anniversary sale event
from Q2 2015 to Q2 and Q3 2016.